Jotul, Tax Credit, and The Dealers who think the US Gov't is putting their products on sale for them

[oldAGE]

Wow. The nerve.

I am a pretty serious guy. When I make a decision, it's based on research, opinions, my plan, and my ability to pay for a good product at a fair price.

So, for a few years, I have had some issues with my model year 2000 Vermont Castings Encore 2550. I have many posts here with my issues. I muddled through the 2008/09 season with no real issues. At the end of the burning season, I decided that I might move on to a more simple stove with a good reputation. I set my sights on a Jotul F500 Oslo. I found it to be well made, simple, and ample. I decided that I would buy in the summer.

Along comes the Tax Credit sponsored by our friends in the US Gov't for a 30% tax credit spread over two years for many things associated with alternative energy heating. Hey, the Jotul Oslo fits the bill. Good for me.

I went shopping today to find the retail price of a brand new, 2009 Jotul F500 Oslo in flat matte black is around $2300 not including tax, delivery, or setup. Wow! I knew that they would be a bit of a premium for a cast iron stove but I didn't think it would break $2K. So, I ask my very friendly retailer, "When is your summer/fall sale?" His response, "We have decided not to have one this year. With the tax credit, you will get the stove discounted less than what our sale price would be..."

I stared at him and blinked like a cartoon character. I was amazed at the balls he had. So, I kindly responded to him and told him "thanks but no thanks." First, I am not going to buy a stove if he wants to gouge me to make a huge profit because in the end, he feels that I will be getting a better price by virtue of this tax credit. I actually said to him, "I don't receive this credit from you, the retailer, or the manufacturer -- it comes from the US Gov't and is associated with my income tax return... it has nothing to do with you or Jotul."

I also told him that I would have purchased this stove, today, at the right price and I was dead serious. I asked him if he was willing to let a sale walk out the door and he said, "sorry."

Wow, the economy must be much better than I thought. With only 287,000 jobs lost last month, things must be going gangbusters in the wood stove industry. With raw material, energy, and transport prices through the floor, let the killings begin I guess. More power to them. I think I will use my beautiful Vermont Castings Encore 2550 for a bit longer... and if that dies, I'll pay a little bit extra for more natural gas at $4/1K cu. ft.

Anyone have similar stories to tell?

AGE

 

[Pagey]

I was under the impression that nearly any well made EPA certified stove in this category was around the $2,000 mark at a minimum. We gave $2,000 for our Endeavor last November. I figure you get what you pay for sometimes.

 

[ddown]

Even Vermont castings are mid 2500s prices went up dramatically last couple of years. Even Englander went up 400 a stove

 

[oldAGE]

Yes. I don't disagree. Around $2K with the expected 10 - 15% pre-season sale brings this to a target of around $1,800. "No sale this year because of the tax rebate..." is one of the issues. Being over priced is another. Again, more power to them and increasing their sales.

Yeah, just for giggles I am going to go to my worthless VC dealer and see what they are giving away. Product manufactured last year when material and transport costs being sky high was obviously a problem for the manufacturer and the retailer. We have all seen how "passing it on to the consumer" worked well for the auto industry. Yet, I don't believe the stove industry will have the same fortune nor will they have the same demand. Every stove in stock is money burning a hole in the retailer's pocket. If they have enough cash to wait out the recovery, good for them. With housing demand still low, their cash-cow fireplace installs are gone too. I can wait. My VC is still beautiful and still does the job.

Just for giggles, just pulled out the receipt for my VC. Purchased new on Jun 26, 2000 for $1410. 3% annual increases brings this to around $1840 in 2009. Toss a few extra points in for good luck and you still don't get $2300 for a similar product.
AGE

 

[CTburning]

August 1 is not pre-season anymore. If you want a deal start looking in March and buy in June. That is the time people are thinking of things to do for summer and not buying a stove. The dealers know that come September when the kids go back to school, the season begins. You could look at a Woodstock Fireview, they are still having a decent sale. If you really want to wait for the best possible deal, start looking around the beginning of March. The credit will be good next year as well. Or you could always buy your stove now and enjoy it this winter. Good luck!

 

[wendell]

I found out they weren't having a sale when I was there this week (and fortunately they didn't tell me what they told you or I would've walked out the door) but they do have a deal on those Hearthstone floor models they are closing out (assuming we went to the same store). I believe Fireside Hearth & Home has a 10% off sale starting next week. As a big bonus, I heard their technical guru is outstanding!

 

[oldAGE]

Thanks for the advice but here in the mid-west, they close out last years models usually before the season starts. As wood stoves don't change, there is very little if any difference between then and now. By the time the heating season ends here, no one cares about heating and the building season is just starting in earnest. Retailers here usually start their advertised sales in the summer, not in the spring. As the retailer told me, they are not having their usual sale because of the Tax Credit. And that's the rub. The only thing they are marking down are floor models of various and limited manufacturers.

 

[Todd]

I wish some of these dealers would just come out with a no haggling fair standard price. I know they have to make their money but they don't have to be rip off artists and try and get as much commission as possible. Some of these stove prices are ridiculous and they could make so much more by lowering the price which would sell more stoves.

 

[BrotherBart]

The fact is a lot of people will buy stoves based on the tax credit, even at list price. If you stop and think about it, would you discount something that you feel you have a good shot at selling at full price?

What I don't think though, is that they are going to see a gold rush for stoves. There are a heck of a lot of other things people need that qualify for the credit and don't involve hauling bark into your living room. I won't be using the credit for a new stove. Lord knows I have too many as it is. I am gonna use it on a high efficiency heat pump. Next year, after the shine has worn off of the credit. And use the credit to offset the income taxes from the 401K withdrawal.

 

[JeffRey30747]

It sounds like you may have only visited one dealer. On any big ticket item, I try to hit at least two or three sources so that I can get an idea of where the market is on something. I bought my Oslo in November 2007 for $1899 plus tax. Jotul's policy of restricting internet sales hinders you a little in doing easy research but their site will at least give you the address and phone number of several nearby dealers. Check them out. Unless supply is tight, at least one of them should be willing to deal with you especially if they think your sale will be "incremental business" and any profit that they get from you better than letting it fall down the line to the next guy.

 

[oldAGE]

It sounds like you may have only visited one dealer.

And there's another issue. It's a bit of collusion here where I live. For the better stoves across any genre (soapstone, cast iron, quality steel, etc), there is only, possibly, one dealer for any manufacturer. When the Vermont Castings dealer went belly up about four years ago, there was no VC dealer for nearly 100 miles other than a guy who "sells on the side" -- a one man operation. A larger masonry company picked up the line with no talent. They are the only VC game in town now and I hear that they may be dropping them. For Jotul, it's one guy here (a very nice operation with a good rep) and the next one is 25 miles away and after that, that's it for 85 miles.

Makes leveraging "dealer support" a bit harder because the trip charges will kill you if you need something from them. So, we are caught between a rock and a hard place. Funny, because the average low here in Madison is in the teens. But the population for a "city" is pretty small. We ain't no Atlanta. That's for sure.

AGE

 

[jtp10181]

I found out they weren't having a sale when I was there this week (and fortunately they didn't tell me what they told you or I would've walked out the door) but they do have a deal on those Hearthstone floor models they are closing out (assuming we went to the same store). I believe Fireside Hearth & Home has a 10% off sale starting next week. As a big bonus, I heard their technical guru is outstanding!

Damn we run sales all the time....

They wont last much longer though, fall is coming, thats when the sales end in the Hearth biz.

oldAGE you should have known to just come see me If you like any of the Quad stoves I'm sure I could work something out with the sales people.

We never took the tax credit as our "sale". We pitched it as a bonus on top of the sale. We still did our "Beat the Rush" free install sale this year (up to $495).

 

[bsa0021]

The next dealer is 25 miles away??? What's wrong with that? The two dealers I visited were both 25-30 miles in opposite directions. I looked at two different stoves and took one quote to the best dealer and bargained against the other dealer and stove. I think most buyers have no alternative but to drive a little farther to get stove service.

 

[stoveguy2esw]

dealers are required to have a summer sale????

transportation, energy and raw material costs through the floor? i dunno completely about energy but steel and fuel for transportation are through the floor , the second floor after going through the ceiling. when you figure we use millions of pounds of steel in an average season even a modest jump in steel prices is a lot of money, and over the last 3 years or so its been a bit more than a modest jump. transport costs are up as well , fuel surcharges are quite high we ship over 50K units in an average season , thats a lot of truckloads, each with a higher fuel surcharge than 3 years ago. then again , you cant get a bottle of coke for a nickle anymore.

 

[oldAGE]

you should have known to just come see me

Hey JTP -- Oh, I am not done yet. Going to visit my VC dealer (wink wink) to see what's new and give them a little more hell and I might just walk across the street and say hello. Don't be surprised if someone pages JTP to see oldAGE.

Chat at you soon.

 

[daryl]

It sounds like you may have only visited one dealer.

And there's another issue. It's a bit of collusion here where I live. For the better stoves across any genre (soapstone, cast iron, quality steel, etc), there is only, possibly, one dealer for any manufacturer. When the Vermont Castings dealer went belly up about four years ago, there was no VC dealer for nearly 100 miles other than a guy who "sells on the side" -- a one man operation. A larger masonry company picked up the line with no talent. They are the only VC game in town now and I hear that they may be dropping them. For Jotul, it's one guy here (a very nice operation with a good rep) and the next one is 25 miles away and after that, that's it for 85 miles.

Makes leveraging "dealer support" a bit harder because the trip charges will kill you if you need something from them. So, we are caught between a rock and a hard place. Funny, because the average low here in Madison is in the teens. But the population for a "city" is pretty small. We ain't no Atlanta. That's for sure

My vote goes to the one guy with a nice operation and a good rep. People think a stove dealer is like a Menards or Lowes they sell you a stove or chimney and thats it. A stove dealer is in it for the long haul. If you have problems or issues they try to resolve them not hand you a phone number to call. and for this personal service you are bound to pay more. This man is making maybe 30 points on this stove not a huge profit. To have someone that can install and service to code and factory specs is important.Just my 2 cents worth.

 

[oldAGE]

The next dealer is 25 miles away??? What's wrong with that? The two dealers I visited were both 25-30 miles in opposite directions. I looked at two different stoves and took one quote to the best dealer and bargained against the other dealer and stove. I think most buyers have no alternative but to drive a little farther to get stove service.

There is this "weird" divide around here. Some dealers of "things" just don't want to deal with us "foreigners." But, this town just lost a GM plant which was the major employer so maybe they are more flexible these days. It's worth the 50 mile round trip. Will see what they have to say. But after that, that's it. Not a lot of choices for the desired stove I'm afraid.

AGE

 

[oldAGE]

dealers are required to have a summer sale????

No, absolutely not. I never said that. But when they do, year after year... you would expect it. The simple fact that they told me they are not this year because the Tax Credit covered it better than they can it means to me that they are not serious about selling product. If the 30% came from the dealer group and the manufacturer, then sure, I can understand. But there is no reason for me to pay them full retail price either. It means that I don't have to buy from them too.

Would you buy a car at sticker price even though you are eligible to receive the CARS rebate? I bet not. At an MSRP of $25000, $4500 is an 18% discount. Not a bad sale price.

AGE

 

[summit]

that thing hasnt been @ 1800 for a couple / few years now.. they are 2246 retail, i don't see them coming down.. you can feel reassured that your vc runs around 2500 brand new, but the jotul is a better value... don't look for too many big bargains this year.. every thing you order will prob be shipped per your order, given the huge f*&^#ups last year in the supply. no dealer is gonna order and have in stock too much inventory to feel the need to have a sale price, too many got burned on that last year when many manf could not deliver.

 

[gibson]

I shopped extensively for my insert last year. At least ten stove shops in my area. I bought my Jotul Rockland insert for about $2300. I am pissed that I dont qualify for the rebate, that being said, you aren't getting a new Oslo for under $2K. The Oslo is about the same price, so that means you get a $690 tax credit. Don't be pennywise and pound-foolish!

 

[Frostbit]

I paid $1949 for my Jotul F400 in Blue Majolica a year ago. Yes, I too am pissed I was left out of the tax credit deal. Another sting is I had (no other choice) to air freight the stove to my location, which was $400. I wouldn't harp on having to drive 25 miles to the next dealer....mine is 500 miles away and its an airplane ride to get there.

Don't even get me started on trucks. The dealers got a get out of jail free card with the Cash for Clunkers program, as they promptly stopped dealing when that came out. Of late dealers have run their asking prices through the roof. I'm still peeved I forcibly own stock in GM and they smile and want to fleece me. They should have died.

 

[humpin iron]

I bet if you offer to cover the dealers overhead for only a month they would give you the stove for free. Heck, I would give you a stove if you just paid the fuel bill for my service trucks for a month.

 

[oldAGE]

Thanks for all the replies. It's a fun conversation to have. I have the luxury of not needing a new wood stove. My goal was to simplify as a hedge against future problems with my nine year old CAT stove. Parts are becoming harder to get and the price for said parts will rise due to lack of supply. But, the beauty is that I have time on my side.

Where I live historically has had the nations lowest unemployment, slow and steady climb in property values, and new home construction that just would not quit. Like everywhere else, we are affected. For us it's quite radical. Where I work -- a modern building complex of office and retail space -- the main office complex totaling 16 floors has three floors vacant, the three retail sections have a 95%, 60%, and 40% vacancy rate respectively. Retail is getting hammered. Being we have maybe three dealers in the area dedicated to fireplace and stoves (not including the big box stores and the specialty furnace/heating suppliers), the competition is not fierce. And with that comes the retailers ability to stand steady and not budge. But, there is a change in the air and the past is the past and the future for many remains uncertain. I guarantee that after the recovery (I see that starting at the end of 2010), people will be behaving differently. I don't see a 20% discount on the MSRP of a Jotul Oslo as being an unreasonable expectation. Raw material costs alone are down over 50% from their highs of last year and demand is through the floor (see Great Lakes shipping data).

Again, I have time on my side. It's always a plus.

AGE

 

[oldAGE]

I bet if you offer to cover the dealers overhead for only a month they would give you the stove for free. Heck, I would give you a stove if you just paid the fuel bill for my service trucks for a month.

I am a very well educated man who is quite successful and I am not an idiot. Have you ever walked into a retailer for a somewhat high ticket item and look them square in the face and ask for a set percentage off as a setting for negotiations? I do it all the time. You have to be willing to walk away. I had to buy about $3200 worth of items a few years ago. There was no way around it. A lot of "two of everything..." I looked the manager right in the eyes and said "because I am buying all this and willing to take all of it right now, I would like a 30% discount on the entire purchase..." My wife stood there with her jaw on the floor and highly embarrassed .He called the owner and came back with a 20% offer. I said we could meet halfway and another phone call and 25% was done. From $3200 to $2400 in the course of less than 10 minutes after I spent an hour and a half in the store. Would I have walked out if they said "No?" You bet.

Did something similar with the builder who added the addition to my home. For his "generosity," he received two remodels and three new home builds from me. He helped save me about $20K and in return, received the opportunity to make that back ten fold or more. It's all about understanding your customer and what they want. This fireplace dealer is not making only $300 per stove. I bet they are making more than $500 per stove. They knew that I had a competitors product and use a competing dealer and they know why I was there and that I was ready to buy.

Again, the issue is not discounting your products because the government is doing it for you is BS. It's like saying that you should have me pay for your service truck because I called you for a warranty call.

AGE

 

[SolarAndWood]

Well put AGE. Every time money changes hands, a bargaining problem exists. And that is a good thing.